Maintain short positions as the bulls are not able to confirm a stronger rebound. The FKLI failed to sustain its prior session’s sharp intraday rebound in the latest session. The index lost ground after hitting a high of 1,274.5 pts to close at 1,231 pts – indicating a decline of 24 pts. The inability of the index to post a positive follow-up in the latest session is indicating that there is no confirmation for a stronger rebound to take place. All in, the negative bias is still firmly in place. Hence, we are keeping our negative trading bias.

In the absence of confirmation for a reversal to take place, traders should remain in short positions. We initiated these at 1,548.5 pts, the closing level of 12 Feb. To manage risks, a stop-loss can now be placed above the 1,274.5-pt level.

The immediate support is revised to 1,212.5 pts, the latest low, this is followed by 1,200 pts round figure. Towards the upside, the immediate resistance is now eyed at 1,250 pts, this is followed by 1,274.5 pts – both are latest session’s price points.

Source: RHB Securities Research - 19 Mar 2020